Solano Company has sales of $580,000, cost of goods sold of $410,000, other oper

Question

Solano Company has sales of $580,000, cost of goods sold of $410,000, other operating expenses of $54,000, average invested assets of $1,800,000, and a hurdle rate of 9 percent. Required: 1. Determine Solano's return on investment (ROI), investment turnover, profit margin, and residual income. (Do not round your intermediate calculations. Enter your ROI and Profit Margin percentage answer to the nearest 2 decimal places, (i.e., 0.1234 should be entered as 12.34%). Round your Investment Turnover answer to 4 decimal places.) Answer is complete but not entirely correct. Return on Investment Investment Turnover Profit Margin 6.44 e, 196 0.3200 20.00 % Residual Income (4600d

Explanation / Answer

Calculate following :

Return on investment (116000*100/1800000) 6.44% Invesment turnover (580000/1800000) 0.3222 Profit margin (116000*100/580000) = 20% Residual income 116000-(1800000*9%) -46000

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